I’m a baby-boomer. I remember a time when pharmaceutical companies were the most admired companies on the planet. They delivered vaccines to prevent us from diseases like smallpox and polio, life-saving drugs for heart disease, and palliatives to ease suffering. They attracted the most brilliant and dedicated scientists.
But something happened. They got greedy. The pharmaceutical industry hit bottom in public opinion, ranking last in Gallup’s list of 25 industries, according to a new annual poll.
Today we are faced with an emergency for Pharma to solve, and there is reason to suspect we can’t trust them. But COVID-19 isn’t like cancer or heart disease, complex diseases with many co-factors we don’t wholly understand, clearly a case of complex causality. COVID-19 is too, but the co-factors collapse into one thing – transmission networks. And we know how to deal with those even though the will seems to be waning.
But what we need from Pharma, while we hold things at bay, is a fast solution, if not a permanent one. But, afterward, depending on who is in charge and how the pharma companies perform, there could be a fundamental change in the industry. There has to be.
Want to publish your own articles on DistilINFO Publications?
Send us an email, we will get in touch with you.
The US government and the pharmaceutical industry found common cause in dealing with the COVID-19 pandemic. As a result, on March 27, 2020, the president signed into law the Coronavirus Aid, Relief and Economic Security Act (CARES), which contained numerous provisions affecting the pharmaceutical industry, including funding for the development of vaccines and treatments in response to the pandemic. Perhaps coincidentally, Gilead Sciences, the owner of the patent for the hoped-for treatment, Remdesivir, spent more on lobbying Congress and the administration in the first quarter of 2020 than it ever has before, according to federal filings. The pharmaceutical company spent $2.45 million on lobbying in the first three months of the year, a 32% increase over the $1.86 million it spent in the first quarter of 2019
It’s a myth that pharmaceutical companies fund their own research. Typically, they fund about 60%. Sometimes the basic science comes from academia. The government contributes about a third of the costs, $40 billion through the NIH alone, with foundations, advocacy organizations, and individual donors responsible for the remaining investments. Where is the quid-pro-quo? Early drafts of the legislation included a provision stipulating that COVID-19 vaccines, drugs, and tests be affordable if they were developed with taxpayer funds. But the final bill included additional language that undercut that requirement.
Rep. Jan Schakowsky, D-Ill., says Gilead’s track record makes her worry that remdesivir could be priced out of reach. And the company is in a legal battle with the federal government over patents for Truvada, an HIV medicine the FDA also approved for use in protecting people at high risk of infection. Taxpayers helped fund research for remdesivir and other potential vaccines and treatments, so Schakowsky added a line to the CARES Act to make sure drug makers don’t set exorbitant prices. During a House Committee on Energy and Commerce hearing in February, Schakowsky asked Health and Human Services Secretary Alex Azar to promise that coronavirus treatments would be affordable for everyone. He declined and told her, “We can’t control that price because we need the private sector to invest.” Azar is a former Eli Lilly & Co. executive.
What does he mean by that? Here is the current crazy rationale for US drug prices. If we did lower drug prices, we would be making a trade-off. Lowering drug profits would make pharmaceuticals a less desirable industry for investors. And less investment in drugs would mean less research toward new and innovative cures.
Why is that not true in every other country? Swiss pharmaceuticals do just fine with prices 30-50% lower. Drug prices were 3.2 to 4.1 times higher in the US on average than in comparison countries, even after rebates were considered, according to a new study. Using reference pricing, or prices based on what other countries pay for drugs,the authors from the Johns Hopkins Bloomberg School of Public Health compared prices across the US, the United Kingdom, Japan and the Canadian province of Ontario for 79 top-selling single-source brand-name drugs that had been on the market for at least three years.
And it’s a feeding frenzy. Not just Gilead. The federal government has pledged one drug company, Moderna, almost $500 million to speed up their coronavirus vaccine work. Their CEO earned $9 million last year, and the company had an effective tax rate of zero.
Source: Diginomica
